This matter comes before the Court on the parties Statement of Circumstances and
Conditional Agreement for Discipline, pursuant to Ind. Admission and Discipline Rule 23, Section
11(g). Respondent, Robert E. Stochel, an attorney admitted to practice in this state
in 1978, has been charged by the Indiana Supreme Court Disciplinary Commission with
lawyer misconduct arising out of a fee dispute with a client in a
contingent fee case. We now find that the discipline agreed to by the
parties, a public reprimand, is appropriate, and herein set forth the facts and
circumstances of this case.
The parties agree that a client hired the respondent, after a referral from
another attorney, to handle litigation involving the estate of the clients mother. The
respondent and the client agreed that the respondent would take the case on
a contingency basis, with the respondent receiving a fee of forty percent (40%)
of any recovery. The respondent did not reduce this agreement to writing.
Ultimately, the respondent settled the clients claim for $180,000, payable $60,000 immediately, followed
by four annual payments of $30,000. The respondent calculated his total fee to
be $72,000 (forty percent of $180,000). Upon receipt of the initial $60,000 payment,
the respondent prepared a settlement statement for the client, which provided that he
would retain $50,000 toward his fee of $72,000 and the client would receive
$10,000. The settlement statement also informed the client that the respondent would retain
$11,000 from each of the next two $30,000 annual payments to cover the
balance of his fee. This resulted in the respondent being paid in full
before the client received the last $60,000 of the agreed settlement.
From the $50,000 attorney fee the respondent withheld from the initial $60,000 installment
of the settlement, the respondent paid the referring attorney $16,000.
Indiana Professional Conduct Rule 1.5(e) prohibits a division of fee among lawyers who
are not in the same firm, unless:
the division is in proportion to the services performed by each lawyer or,
by written agreement with the client, each lawyer assumes joint responsibility for the
representation;
the client is advised of and does not object to the participation of
all the lawyers involved; and
the total fee is reasonable.

The parties agree that: (1) the respondent and the referring attorney were not
members of the same firm; (2) the payment was neither proportional to the
services performed by each attorney nor pursuant to a written agreement with the
client under which each attorney assumed joint responsibility for the representation; and (3)
the client was neither advised of nor consented to the division of the
fee. The parties concede that other than his initial consultation with the
client, for which he received a fee of $250, the referring attorney had
no other contact with the client or the litigation. The client ultimately
sued the respondent and the claim was settled by the respondent paying the
client the amount paid to the referring attorney. We find that the
respondent violated Prof.Cond.R. 1.5(e).
Professional Conduct Rule 1.5(c) requires that contingent fee agreements be in writing and
state the method by which the fee is to be determined. Professional
Conduct Rule 1.5(b) requires the basis or rate of a fee be communicated,
preferably in writing, to a client that the attorney does not regularly represent.
We find that the respondent, by failing to reduce his contingent fee
agreement with the client to writing and by failing to communicate the rate
or basis of the fee to his client, violated these provisions.
We also find that the respondent violated Prof.Cond.R. 1.5(a), which prohibits an attorney
from charging an unreasonable fee. The fee agreement called for the respondent
to receive a contingent fee of 40%, yet upon receipt of the first
payment, the respondent retained in excess of 83% of the funds received as
his fee. Though in the end the respondents fee represented only 40% of
the total settlement, the respondent initially denied the client of the use and
benefit of funds he was entitled to receive. The respondents collection of over
80% of the initial settlement proceeds was contrary to the parties agreement and
unreasonable. In a similar case, where the contingent fee agreement called for a
total fee of ten percent (10%), we found that the retention of $50,000
from initial payments totaling $100,000 in a structured settlement totaling $550,000 was unreasonable.
Matter of Myers, 663 N.E.2d 771 (Ind. 1996). Absent a
contrary written agreement between the lawyer and the client, attorneys fees should be
taken only as settlement proceeds are received. Restatement (Third) of the Law
Governing Lawyers, Section 35(2) (providing that Unless the contract construed in the circumstances
indicates otherwise, when a lawyer has contracted
for a contingent fee, the lawyer
is entitled to receive the specified fee only when and to the extent
the client receives payment.).
Having found misconduct, we must now assess the appropriateness of the agreed sanction,
a public reprimand. It is clear that the respondents failure to reduce the
terms of the contingent fee arrangement to writing led to the confusion regarding
the payment of his fee. This failure also was responsible for the
client not knowing or consenting to a division of the attorney fees. As
we have noted previously:
Lawyers are obligated to act with an allegiance to the interests of their
clients. Most clients must pay lawyers engaged in private practice for their services,
thus creating a risk of conflicting economic interests. Lawyers almost always possess the
more sophisticated understanding of fee arrangements. It is therefore appropriate to place the
balance of the burden of fair dealing and the allotment of risk in
the hands of the lawyer in regard to fee arrangements with clients.

Myers, 663 N.E.2d at 774.
Because we favor agreed resolutions of disciplinary charges, we accept the parties agreed
sanction of a public reprimand. However, we note that in the future
it will be appropriate in such cases to impose greater sanctions, including, but
not limited to, restitution to the client of the economic value of the
loss of the use and benefit of funds rightfully belonging to the client.
The respondent, therefore, is hereby reprimanded and admonished for the misconduct set out
above.
The clerk of this Court is directed to provide notice of this order
in accordance with Admis.Disc.R. 23(3)(d) and the hearing officer in this matter, and
to provide the clerk of the United States Court of Appeals for the
Seventh Circuit, the clerk of each of the United States District Courts in
this State, and the clerk of each of the United States Bankruptcy Courts
in this state with the last known address of the respondent as reflected
in the records of the clerk.
Costs of this proceeding are assessed against the respondent.
DICKSON, SULLIVAN, BOEHM and RUCKER, JJ., concur.
SHEPARD, C.J., concurring. I have voted to approve this sanction only because it
comes to us in the form of an agreement. If it came to
us as a litigated case, I would vote for a suspension.